Low-Income Families Merge Onto Internet With Help From Cable Companies

November 9, 2011

An initiative, called Connect to Compete, from the Federal Communications Commission (FCC), will attempt to offer affordable broadband internet access into the homes of low-income Americans, Jasmin Melvin of Reuters is reporting.

Approximately 100 million Americans do not currently have high-speed internet access in their homes, due primarily to the cost of such service which can be prohibitive for many households.

Families who are currently enrolled for free or low-cost school lunches will be allowed to purchase broadband internet costing less than $10 per month and will also be able to purchase low-cost computers from leading technology companies. The program is expected to roll out next spring in 10 to 15 pilot cities, with nationwide availability in fall 2012.

“We think we´re going to move the needle on the broadband adoption gap,” FCC Chairman Julius Genachowski said of his hopes for the new commitments made to the initiative launched last month.

Software giant, Microsoft and tech retailer, Best Buy have already signed on to help boost digital literacy and computer skills with this program with Microsoft providing software and Morgan Stanley developing a microcredit program so that families can pay for those computers, New York Times´ Brian Stelter reports.

Participating cable companies such as Time Warner Cable, Cox and Charter are not expected to sustain a significant financial loss. Broadband service has a high markup, and the $9.99 price will more than cover the overhead costs of providing monthly internet service.

A National Telecommunications and Information Administration (NTIA) study finds that only 55 percent of black households and 57 percent of Hispanics households use broadband internet, while 72 percent of white households and more than 80 percent of Asian households do.

A lack of access to high-speed internet is no longer a key reason why the digital divide persists, NTIA says, as

With broadband service available to about 95 percent of households in the US, a lack of access to broadband is no longer a key reason why the digital divide persists, NTIA says. Nearly half of those who didn´t have broadband access said they have no interest or need for it, while about a quarter said affordability was an issue, Mike Snider and Roger Yu of USA Today report.

Karen Mossberger, a professor at the University of Illinois at Chicago who studies the issue, said the lack of interest may be a factor among senior citizens, but her studies have shown that low-income families cite high cost as the principal barrier. “Cost is a really huge factor,” she says. “Especially among African American and Hispanic groups.”